Healthcare sharing ministries: a financial planning guide

What is a healthcare sharing ministry?

A healthcare sharing ministry (HSM) is a faith-based nonprofit whose members voluntarily share each other's eligible medical costs. Unlike insurance, there is no actuarial premium, no guaranteed benefit, and no state insurance department backstop. Members pay a monthly "share" into the pool; when a qualifying need arises, the ministry facilitates sharing from other members' contributions.

Five HSMs qualify for the Affordable Care Act's religious exemption, meaning their members are not subject to the individual shared-responsibility requirement (though the federal penalty has been $0 since 2019):¹

• Christian Healthcare Ministries (CHM) — the largest, oldest, and most affordable for catastrophic coverage. Three tiers (Bronze, Silver, Gold). No income limit; requires Christian testimony and agreement to lifestyle guidelines.
• Medi-Share — operated by Christian Care Ministry. Monthly share amounts vary by age, household size, and chosen Annual Household Portion (AHP) — their equivalent of a deductible. Requires an active church membership statement.
• Samaritan Ministries — peer-to-peer model; members send checks directly to other members with a prayer note. Requires a statement of Christian faith including belief in the divinity of Jesus Christ.
• Liberty HealthShare — slightly broader eligibility than the others; accepts members of varied religious and ethical backgrounds. Lower barrier to join, though lifestyle guidelines still apply.
• OneShare Health — a smaller option with a faith-commitment requirement similar to Samaritan's.

Each ministry publishes its statement of faith and lifestyle guidelines. Common requirements include no tobacco use, no illegal drug use, and — depending on the ministry — no sexual activity outside of heterosexual marriage. These guidelines are not incidental; violations can result in ineligibility for sharing on a particular need.

How sharing works in practice

Every HSM structures sharing differently, but the general mechanics follow the same pattern:

1. Annual Household Portion (or equivalent). The amount you pay out of pocket before the ministry begins sharing your bills — functionally similar to a deductible. AHPs typically range from $500 to $5,000 depending on your tier. Unlike insurance deductibles, there is generally no out-of-pocket maximum cap in the same sense — large claims above certain thresholds may be handled separately (CHM's "Brother's Keeper" program, for example, addresses catastrophic needs above $250,000).
2. Eligible needs. Each ministry defines which medical needs qualify. Pre-existing conditions are often excluded for the first 1–3 years of membership. Preventive care (annual physicals, routine screenings) may not be shareable. Maternity care, mental health, and substance abuse coverage varies significantly by ministry.
3. The sharing process. You receive care, submit documentation to the ministry, and the ministry facilitates payment from the pool — either directly to providers or to you for reimbursement. Samaritan's direct member-to-member model adds a community dimension most members cite as spiritually meaningful.

This is not insurance. HSMs are not licensed insurance products. There is no state guarantee fund if the ministry's finances fail, no binding coverage obligation, and no recourse under insurance law if a claim is declined. The ministry's track record and financial transparency matter.

The financial planning implications (what most members miss)

1. HSA eligibility: you lose it entirely

This is the biggest financial planning gotcha for HSM members who have previously used or are considering a Health Savings Account.

To contribute to an HSA, you must be enrolled in a qualifying High Deductible Health Plan (HDHP) as defined by the IRS — a licensed insurance plan meeting specific deductible minimums ($1,650 single / $3,300 family in 2026) and out-of-pocket maximums ($8,300 single / $16,600 family in 2026).² Healthcare sharing ministries are not insurance plans and do not qualify as HDHPs.

The consequence: while you are an HSM member with no other qualifying coverage, you cannot contribute to an HSA. Any HSA contributions made during this period are excess contributions subject to a 6% excise tax plus income tax on the excess. If you have an existing HSA balance, you can still spend it tax-free on qualified medical expenses — the restriction is on new contributions, not existing funds.²

For families who have built significant HSA balances under prior employer coverage, the strategy question becomes: is the monthly savings from switching to an HSM worth forgoing future HSA contributions and the associated triple-tax advantage? A planner can model this with real numbers.

2. Monthly shares are not tax-deductible

Under current law (2026), monthly contributions to a healthcare sharing ministry are not deductible as medical expenses on Schedule A, and they are not deductible as health insurance premiums — because they are not insurance premiums.³

This matters most for:

• Self-employed individuals — who can normally deduct 100% of health insurance premiums as an above-the-line adjustment to income (not just as an itemized deduction). HSM members do not get this deduction.
• High itemizers — who might otherwise count healthcare spending toward the Schedule A medical deduction (subject to the 7.5% AGI floor). Monthly shares to the ministry do not count. However, actual medical bills paid out of your HSM's Annual Household Portion — the money you pay directly to providers — typically do qualify as medical expenses for Schedule A purposes.

Legislative note: H.R. 2062 (119th Congress) would amend the Internal Revenue Code to treat HSM membership fees as deductible medical expenses. As of 2026 this bill has not been enacted. If it passes, the tax math changes significantly — worth monitoring if you are in a high-bracket year.⁴

3. Employer reimbursement via HRA: sometimes yes, sometimes no

Some small employers want to reimburse employees for HSM membership as a benefit. The answer depends on the HRA type:

• Qualified Small Employer HRA (QSEHRA) — can reimburse health insurance premiums tax-free, but because HSM shares are not insurance premiums, reimbursement through a QSEHRA for HSM shares is generally not tax-favored under current IRS guidance.
• Individual Coverage HRA (ICHRA) — requires the employee to be enrolled in individual health insurance; HSM membership does not qualify as the underlying coverage for ICHRA purposes.
• Informal employer payments — if an employer simply pays an employee's HSM share as additional compensation, it's deductible to the employer as compensation but taxable to the employee as W-2 income.

Employer HR decisions about healthcare benefits for employees in HSMs are an area where guidance is evolving. Consult a benefits attorney or CPA for fact-specific advice.

4. What you CAN deduct: unreimbursed medical expenses

Even without deducting monthly shares, HSM members may be able to deduct:

• Amounts paid out of pocket to providers that are within the Annual Household Portion (these are medical expenses you actually paid).
• Other unreimbursed qualified medical expenses — co-pays on supplemental coverage, dental, vision, prescription drugs, etc.

The Schedule A medical deduction requires you to itemize and applies a 7.5% AGI floor — meaning only the portion of qualifying expenses above 7.5% of your AGI is deductible. For most HSM members this floor is high enough that the deduction provides little benefit unless you have a very large medical year.

HSMs and retirement-age planning

This is another area where the planning complexity compounds:

• HSMs and Medicare: When you turn 65 and become eligible for Medicare Part A (even if you defer enrollment in Part B), IRS rules disqualify you from HSA contributions regardless of your HSM status. Additionally, most HSMs require members to enroll in Medicare upon eligibility — HSM sharing is secondary to Medicare, and many ministries will not share claims that Medicare would cover. In practice, most members disenroll from the HSM when they go on Medicare.
• The coverage gap: 62–65. For early retirees who leave employer coverage between 62 and Medicare eligibility at 65, an HSM can be a low-cost bridge — often significantly cheaper than COBRA or marketplace plans — with the understanding that HSA contributions are off the table. If a large claim occurs before Medicare, the financial exposure depends heavily on the ministry's sharing rules and your AHP level.
• Spouse coverage. If one spouse is on Medicare and the other is not yet 65, the non-Medicare spouse can use an HSM; the Medicare spouse cannot contribute to an HSA in any case. A household might run both Medicare (one spouse) and HSM (other spouse) simultaneously during a transition window.

The real cost comparison: what to model

HSM advocates often cite the monthly savings over marketplace or employer premiums. The full picture requires modeling the scenarios side by side:

For a self-employed family in the 24% bracket, the lost HSA deduction alone is worth roughly $2,100 per year (24% × $8,750 family limit) — a number that doesn't appear in any monthly share comparison. A fee-only advisor can build the full after-tax cost model for your specific income and tax situation.

When a faith-aligned advisor helps

The HSM vs. insurance decision touches tax planning, retirement planning, and risk management simultaneously. A stewardship-minded fee-only advisor can help you:

• Model the after-tax cost of your current HSM vs. a qualifying HDHP that restores HSA eligibility.
• Optimize HSA spending and investment if you return to HDHP coverage.
• Plan the Medicare transition timeline and the early retirement coverage gap (62–65).
• Structure the self-employed health insurance deduction correctly when you switch back to qualifying coverage.
• Integrate healthcare cost planning with your giving goals — HSM cost savings sometimes become tithing margin.

These questions are interconnected. The family that switched to Samaritan Ministries for faith and cost reasons, then added BRI to their 401(k) and is trying to fund a DAF — their planning is a system, not a set of isolated decisions. That's the kind of advisor this site matches you with.